G4S had been expected to turn a profit of about £10m on the security staffing contract, before it outlined the hit it faces over the deployment of 3,500 military personnel to fill shortages.

The £60m difference meant analysts at broker Seymour Pierce downgraded their 2012 profit forecast by more than 12pc, to adjusted pre-tax profits of £424.3m.

As the share price plunged, the future of chief executive Nick Buckles was in doubt ahead of his grilling on Tuesday by MPs, alongside fellow G4S executive Ian Horseman-Sewell, who headed the project.

The company’s chairman John Connolly said: “We don’t want to do anything that smacks of short-term expediency, but it would be right to consider whether any members of the senior team are best placed to take the company forward.”

Credit Suisse analysts say that while the costs around the bungled contract are tiny in comparison to the FTSE 100 giant – amounting to just over 1pc of its current £3.6bn market capitalisation – the more significant issue “will be how this high profile disappointment impacts its ability to secure government contracts in the future”.

Around 10pc of G4S's revenue comes from UK public sector contracts, ranging from police and prisons and welfare to work programmes.

Investors have expressed disquiet over the latest “fiasco” to hit the company after an attempt to buy Danish rival ISS went wrong last year.

"He should have stepped down a while ago,” said one shareholder. "I don't see how his position remains tenable. Let's not forget that this is not the first time he is in charge while the company is making major mistakes."

Another shareholder, Jane Coffey, head of equities at Royal London Asset Management (RLAM) which holds around 0.6pc of G4S, held back from calling for Mr Buckles’ exit, but cautioned over the timing if he goes.

“I don’t think it’s a good idea that he goes this week,” she said. “I think they should get on with the execution [of the Olympics contract] and have the investigation afterwards."

Kevin Lapwood, an analyst at Seymour Pierce, predicted that Mr Buckles, who said at the weekend that he is “committed to staying”, will exit the post.

"It appears certain that Mr Buckles will fall on his sword along with other senior UK management. This could lead to a period of instability at the company, which appointed a new chairman just over a month ago,” he said.

The company would not comment on whether Mr Buckles will remain in his position other than refer to his and his chairman's latest comments.

Mr Buckles has said that he will not receive a bonus. Nonetheless, if he goes, he stands poised to exit with a package of up to £21m. That comprises his £830,000 salary, shares worth £5.7m, an £8.7m pension pot and – to what extent is unclear – up to £5.7m shares vesting under a long-term incentive plan.